Sunday, September 27, 2015

the key report this week was the 3rd estimate of 2nd quarter GDP from the Bureau of Economic Analysis, which was released on Friday...other widely watched reports included the August advance report on durable goods from the Census bureau, and the two reports on home sales: the August report on new home sales from the Census bureau and the August report on existing home sales from the National Association of Realtors (NAR)...also released this week was the Chicago Fed National Activity Index (CFNAI) for August, a weighted composite index of 85 different economic metrics, constructed such that a zero value indicates economic growth at the historical trend rate...the CFNAI fell from a revised +0.51 in July to -0.41 in August, which left the 3 month average at +0.01, indicating national economic activity has been very close to the historical trend this summer...the week also saw two more regional Fed manufacturing surveys for September; the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reportedits broadest composite index fell to -5, following last month's reading of 0, indicating the onset of a regional slowdown, as the regional index for September new orders fell from 1 to -12...then the Kansas City Fed manufacturing survey, covering a region that includes western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index was at -8 in September, little changed from -9 in August and -7 in July, indicating a ongoing regional contraction, mostly in the energy industry...thus far, the 4 regional Fed surveys that have reported for September have all been negative...

2nd Quarter GDP Revised to Show Growth at a 3.9% Rate

the Third Estimate of our 2nd Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services increased at a 3.9% annual rate in the quarter, revised from the 3.7% growth rate reported in the second estimate last month, as personal consumption expenditures, nonresidential fixed investment, and residential investment increased more than previously estimated and the increase in private inventory investment was smaller than previously estimated...in current dollars, our second quarter GDP grew at a 6.1% annual rate, increasing from what would work out to be $17,649.3 billion a year in the 1st quarter to $17,913.7 billion annually in the 2nd quarter, with the headline 3.9% annualized rate of increase in real output arrived at after an annualized inflation adjustment of 2.1% was applied to the current dollar change...

while we cover the details below, remember that the press release for GDP reports all quarter over quarter percentage changes at an annual rate, which means that they're expressed as a change a bit over 4 times of that what actually occurred over the 3 month period, and that they only use the prefix "real" to indicate that each change has been adjusted for inflation using price changes chained from 2009, and then that all percentage changes in this report are calculated from those 2009 dollar figures, which would be better thought of as a quantity indexes than as any reality based dollar amounts...given the misunderstanding evoked by the oversimplified press release, all the data that we'll use in reporting the changes here will come from the pdf for the 3rd estimate of 2nd quarter GDP, which is linked to on the sidebar of the BEA press release...specifically, we refer to table 1, which shows the real percentage change in each of the GDP components annually and quarterly since 2012, table 2, which shows the contribution of each of the components to the GDP figures for those months and years, table 3, which shows both the current dollar value and inflation adjusted value of each of the GDP components, table 4, which shows the change in the price indexes for each of the components, and table 5, which shows the quantity indexes for each of the components, which are used to convert current dollar figures into units of output represented by chained dollar amounts...the pdf for the 2nd estimate of the 2nd quarter, which this estimate revises, is here...

real personal consumption expenditures (PCE), the largest component of GDP, were revised to show real growth at a 3.6% annual rate, rather than the 3.1% growth rate reported last month, as a revised 5.8% increase in the rate of personal spending was deflated with an annualized 2.2% increase in the PCE price index, an inflation adjustment which remained unchanged from the first estimate....real consumption of durable goods rose at a 8.0% annual rate, which was revised from 8.2% in the 2nd estimate, and added 0.57 percentage points to GDP, as real output of automotive products consumed was revised down to show growth at a 9.7% annual rate...real consumption of nondurable goods by individuals rose at a 4.3% annual rate, revised from the 4.1% increase reported in the 2nd estimate, and added 0.62 percentage points to 1st quarter growth, as only real consumption of fuel decreased by a statistically insignificant amount (rounded to 0.0%)....in addition, real consumption of services rose at a 2.7% annual rate, revised from the 2.0% rate reported last month, and added 1.20 percentage points to the final GDP tally...almost all of the services categories saw increases in the 2nd quarter except for real consumption of housing and utilities, which declined from the higher than the seasonally adjusted norm that we saw in the colder than normal 1st quarter..

seasonally adjusted real private domestic investment grew at a 5.0% annual rate in the 2nd quarter, revised from the 5.2% growth estimate made last month, mostly due to slower inventory accumulation, as real growth in private fixed investment was revised from 4.1% to 5.2%...investment in non-residential structures was revised up from a 3.1% growth rate to a 6.2% growth rate, investment in equipment grew at a 0.3% rate, not the 0.4% decline previously reported, and the quarter's investment in intellectual property products was revised from growth at a 8.6% rate to growth at a 8.3% rate; in addition, growth in residential investment was revised from 7.8% to 9.3% annually…after those revisions, investment in non-residential structures added 0.18 percentage points to the 2nd quarter growth rate, investment in equipment added 0.03 percentage points to 2nd quarter growth, investment in intellectual property added 0.33 percentage points, while growth in residential investment added 0.30 percentage points to 2nd quarter GDP...

meanwhile, the change in real private inventories was revised from the previously reported $121.1 billion in real inflation adjusted growth to show inventory growth at an inflation adjusted $113.5 billion rate, which comes after inventories had grown at an inflation adjusted $112.8 billion rate in the 1st quarter....hence the $0.7 billion larger real inventory growth only added 0.02 percentage points to the 2nd quarter's growth rate, in contrast to the 0.22 percentage points addition to GDP from inventory growth reported in the 2nd estimate...however, since lower inventories indicate that fewer of the goods produced goods during the quarter remained 'on the shelf', their increase by just $0.7 billion means real final sales of GDP were only lower by that small amount, and hence real final sales also increased at a 3.9% rate in the 2nd quarter, revised up from the real final sales growth at 3.5% reported last month....

the 2nd quarter increase in real exports was revised slightly lower while the increase in real imports was revised higher with this release, so our net trade was a smaller positive than previously reported, as exports are added to GDP because they are part of our production that was not consumed or added to investment in our country (and not counted elsewhere), while the increased imports subtract from GDP because they represent either consumption or investment added elsewhere that was not produced here....our real exports grew at a 5.1% rate rather than the 5.2% real export growth reported in the 2nd estimate, and as a result added 0.64 percentage points to 2nd quarter GDP growth, revised from 0.65 percentage points added to the 2nd estimate...meanwhile, the real growth of our imports was revised to 3.0% from the previously reported 2.8% growth and hence imports subtracted 0.46 percentage points from the quarter's growth rate, revised from 0.42...thus, our trade balance added a net 0.18% percentage points to 2nd quarter GDP, still much better than the 1st quarter, when our worsening trade balance had subtracted 1.93 percentage points from first quarter growth...

finally, there were barely any revisions to real government consumption and investment in this 3rd estimate...real federal government consumption and investment was unchanged from the 1st quarter and unchanged from the 2nd estimate, and hence added nothing to 2nd quarter GDP...real federal spending for defense grew at a 0.3% rate, which was unrevised, while all other federal consumption and investment shrunk at a 0.5% rate, which was revised from the 0.4% contraction reported last month....real state and local consumption and investment grew at a 4.3% rate, also unchanged from the 2nd estimate, while they contributed 0.46 percentage points to second quarter growth, fractionally lower than the 0.47 percentage point contribution reported in the 2nd estimate...note that government outlays for social insurance are not included in this GDP component; rather, they are included in personal consumption expenditures only when such funds are spent on goods or services, indicating an increase in the output of goods or services...

our FRED bar graph below, which can also be viewed as an interactive at the FRED site, has been updated with these latest GDP revisions...each color coded bar shows the real inflation adjusted change, expressed in billions of chained 2009 dollars, in one of the major components of GDP over each quarter since the beginning of 2012...in each quarterly grouping of seven bars on this graph, the quarterly changes in real personal consumption expenditures are shown in blue, the changes in real gross private investment, including structures, equipment and intangibles, are shown in red, the quarterly change in real private inventories is in yellow, the real change in imports are shown in green, the real change in exports are shown in purple, while the real change in state and local government spending and investment is shown in pink, and the real change in Federal government spending and investment is shown in grey...those components of GDP that contracted in a given quarter are shown below the zero line and subtract from GDP, those that are above the line grew during that quarter and added to GDP; the exception to that is imports in green, which subtract from GDP, and which are shown on this chart as a negative, so that when imports shrink, they will appear above the line as an addition to GDP, and when they increase, as they did in the recent quarter, they'll appear below the zero line...it’s fairly clear from this graph that our personal consumption expenditures has underpinned GDP growth over this period, while increasing imports has been the major negative…

August New Orders for Durable Goods Down 2.0%; Shipments and Inventories Unchanged

the nominal value of new orders for durable goods fell back in August after June orders were boosted by one time Boeing jet orders and and July orders were boosted by a surge of new car orders...the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (pdf) from the Census Bureau reported that the widely watched new orders for manufactured durable goods fell by a seasonally adjusted $4.8 billion or 2.0% to 236.3 billion, following a July increase of 1.9% that was revised from the previously reported 2.0%, and a June increase of 4.1% that was statistically unrevised from last month...year to date new orders remain 4.6% below the orders level of 2014, but some of that decrease is due to falling prices in some durable goods, such as primary metals and fabricated metal products...as is usually the case, the volatile monthly change in new orders for transportation equipment drove the headline change, as those orders fell 5.8% to $83,231 million on a 5.9% decrease to $15,101 million in new orders for commercial aircraft and a reversal of last month's 20% increase in new orders for ships and boats...excluding new orders for transportation equipment, new orders were statistically unchanged, down by just $25 million to $157,568 million, as the important new new orders for nondefense capital goods excluding aircraft, a proxy for equipment investment, fell 0.2% to $69,795 million, after increasing by 1.5% June and 2.1% in July, both of which have been upwardly revised ..

the seasonally adjusted value of August shipments of durable goods, which will be inputs into 3rd quarter GDP after an inflation adjustment, were virtually unchanged at $243.2 billion in August after they rose by 1.0% in July and 0.9% in June...much of the change was due to shipments of motor vehicles and parts, which fell 1.4% to $52,967 after rising 4.7% in July; excluding the volatile transportation equipment sector, other shipments of durable goods were up by $26 million to $162,417 million, which is again statistically unchanged...meanwhile, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose by $0.1 billion to $401.4 billion, which is considered statistically unchanged, after July's decrease by 0.2%, which was revised from the originally reported unchanged... inventories of transportation equipment were up 0.7% to $132,546 on a 2.9% increase in inventories of military aircraft; without that, inventories would have fallen 0.3% to $268,854 million...since prices for industrial commodities less fuel were down 0.3% in August, real inventories should be closed to unchanged, but following the downward revision of July inventories, 3rd quarter inventories continue to appear to be a negative for next month's 3rd quarter report..

we consider unfilled orders for manufactured durable goods a better measure of industry conditions than the widely watched but volatile new orders, but they also fell in August, with the order backlog decreasing $2.2 billion or 0.2 percent to $1,195.3 billion, on the heels of a 0.2% increase in July...this left unfilled orders virtually unchanged from the level of both May and June, as the August backlog in orders for transportation equipment fell $2.1 billion or 0.3 percent to $800.3 billion, which you'll note is more than half the total of unfilled orders outstanding....without the transportation equipment sector, August's unfilled orders fell by $137 million to $394,931 million, considered statistically unchanged.. unfilled orders for durable goods are now 1.2% below the year ago level, with orders for computers, primary metals, machinery and defense goods all seeing sizable a year over year decreases in their order backlog...

New Home Sales Continue 20% Above Last Year's Pace

the Census report on New Residential Sales for August (pdf) estimated that new single family homes were selling at a seasonally adjusted rate of 552,000 new homes a year, which was 5.7 percent (±16.2%)* above the revised July rate of 522,000 new single family homes a year and 21.6 percent (±18.7%) above the estimated annual rate that new homes were selling at in August of last year....as you know, the asterisk indicates that based on their small sampling, Census could not be certain whether August new home sales rose or fell from those of July, and the figures in parenthesis represent the 90% confidence range for reported data in this report, which has the largest margin of error and subject to the largest revisions of any census construction series...sales new single family homes in July were revised from the annual rate of 507,000 reported last month to 522,000 a year with this report, while the annual rate of June sales was revised from 481,000 to 466,000, and the annual rate of May new home sales was revised from 521,000 to 513,000...

the annual rates of sales reported here are extrapolated from the estimates of Census field reps, which showed that approximately 45,000 new homes sold in August, up from 44,000 new homes sold in July, which was revised from the originally reported 43,000....the unadjusted estimate for June home sales was revised from 45,000 to 43,000, while the estimate for May sales, originally reported at 51,000, was revised from 48,000 to 47,000....the raw numbers from Census field agents further estimated that the median sales price of new houses sold in August was $292,700, up from $291,100 in July, which was originally reported as $285,900, while the average August new home sales price was $353,400, up from $344,800 in July, but down from the average sales price of $356,200 in August a year ago....a seasonally adjusted estimate of 216,000 new houses remained for sale at the end of August , which represents a 4.7 month supply at the August sales rate...for more details and graphics on this report, see Bill McBride's two posts, New Home Sales increased to 552,000 Annual Rate in August and Comments on August New Home Sales..

Existing Home Sales Fall 4.8% in August

the National Association of Realtors (NAR) reported that seasonally adjusted existing home sales fell by 4.8% in August, projecting that 5.31 million homes would sell over an entire year if August sales were extrapolated over that year, which was still a rate 6.2% higher than the annual rate projected in August of a year ago…the annual rate of July home sales was revised slightly from 5.59 million to 5.58 million....the NAR also says that the median existing-home price for all housing types in August was $228,700, which was 4.7% higher than a year earlier and the 42nd consecutive year over year increase in home prices...the NAR press release, which is titled Existing-Home Sales Stall in August, Prices Moderate, is in easy to read plain English, so you can check that for additional details...as sales of existing properties do not add to our national output, neither these sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered…

since this report is entirely seasonally adjusted and at a fairly meaningless annual rate, we'll take a quick look at the raw data overview (pdf), which shows that 505,000 homes actually sold in August, down 8.3% from the 551,000 homes that sold in July (which was revised from 552,000) but still up 5.4% from the 479,000 homes that sold in August last year...the decrease in August home sales was seen in all regions of the country, ranging from an decrease of 10.9% to 122,000 home sales in the Midwest to a 6.1% decrease to 107,000 home sales in the West....that same pdf indicates that the median home selling price for all housing types fell from a downwardly revised $231,800 in July to $228,700 in August, while the average home sales price was $271,600, down 1.6% from the $275,900 average sales price in July, but up 3.0% from the $263,800 average home sales price of August a year ago, with the regional averages ranging from a low of $214,600 in the Midwest to a high of $355,400 in the West...for additional coverage with long term graphs on this report, see Existing Home Sales in August: 5.31 million SAAR and A Few Random Comments on August Existing Home Sales, both from Bill McBride at Calculated Risk…

Sunday, September 20, 2015

the past week saw the release of the lion's share of the major monthly reports on August: Retail Sales from the Census Bureau, Industrial Production and Capacity Utilization from the Fed, the Consumer Price Index from the Bureau of Labor Statistics, and the New Residential Construction report (pdf) from the Census Bureau...the week also brought the Regional and State Employment and Unemployment Summary for August and the final major report for July: the Manufacturing and Trade: Inventories and Sales report, which is covered in the financial press as the business inventories report, and with the release of the Consumer Price Index, the August report on Real Average Hourly Earnings, which indicated that inflation adjusted and seasonally adjusted earnings for all employees increased by 0.5% from July to August, which resulted from a 0.3% increase in average hourly earnings and a 0.1% decrease in the CPI, while real average weekly earnings increased by 0.7% on the 0.5% increase in real average hourly earnings and a 0.3% increase in the average workweek (totals don't add up due to rounding)...in addition, this week also saw the release of the first two regional Fed manufacturing indexes for September: the Empire State Manufacturing Survey from the New York Fed, which covers New York and northern New Jersey, reported their headline general business conditions index remained negative at -14.7 in September, nearly unchanged from the 6 year low of -14.9 in August, indicating recession-like conditions in the region's manufacturing sector, while the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell from 8.3 in August to -6.0 in September, suggesting the onset of a regional contraction in that area's manufacturing facilities....

August Retail Sales 0.3% Higher Than Was Reported for July

seasonally adjusted headline retail sales rose less than the expected 0.3% in August, but an upward revision to July sales accounted for the difference.....the Advance Retail Sales Report for August (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $447.7 billion, which was an increase of 0.2 percent (±0.5%) from July's revised sales of $446.9 billion and 2.2 percent (±0.7%) above the sales of August of last year...July's seasonally adjusted sales were revised from the $446.5 billion first reported to $446.9 billion, while June's sales, which were revised up to $443.9 billion from the originally reported $442.0 billion last month, were revised down a bit to $443.7 billion with this report....hence, this report implies a small downward revision to 2nd quarter personal consumption expenditures that may not even be statistically significant for GDP....estimated unadjusted sales in August, extrapolated from surveys of a small sampling of retailers, indicated unadjusted sales rose 0.16%, from $456,635 million in July to $457,352 million in August, while they were up 1.6% from the $450,365 million of sales in August a year ago...

once again, included below is the table of monthly and yearly percentage changes in sales by business type taken from the Census pdf, which you should all be familiar with by now.....the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business type from July to August in the first sub-column, and then the year over year percentage change for those businesses since last August in the 2nd column; the second pair of columns gives us the revision of last month’s July advance monthly estimates (now called "preliminary") as revised in this report, likewise for each business type, with the June to July change under "June 2015 revised" and the revised July 2014 to July 2015 percentage change in the last column shown...for your reference, the table of last month’s advance July estimates before this month's revision is here....

here we can see that once again it was the 0.7% increase to $93,160 million in sales at automobile and parts dealers that underpinned the August sales increase; without those automotive sales, retail sales only increased by 0.1% to $354,555 million...both types of food retailers also saw 0.7% sales increases in August, as sales at food and beverage stores rose to $57,297 million and sales at restaurants and bars rose to $52,314 million...in addition, drug stores saw sales rise 0.8% to $28,547 million, and miscellaneous store retailers saw sales rise 0.9% to $10,338 million...on the other hand, three types of retailers saw their seasonally adjusted sales decrease significantly in August: sales at sales at building material and garden supply stores saw a 1.8% decrease to $27,153 million in sales; sales at furniture stores were down 0.9% to $8,580 million, and sales at gas stations fell 1.8% to $37,142 million, though the later was down due to a drop in the price of gasoline...for the past year, the 8.2% increase in sales at restaurants and bars was the largest increase of any retail type, while the 17.2% drop in gasoline stations sales was the greatest decrease and obviously due to lower gasoline prices...

Consumer Prices 0.1% Lower in August on Cheaper Fuel

overall consumer inflation remained subdued in August while lower prices for fuel turned the monthly index negative again...the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices fell 0.1% in August after rising 0.1% in July and 0.3% in June, while lower energy costs held the year over year increase to just 0.2%....the unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, slipped to 238.316 in August from 238.654 in July, which was actually less than 0.2% higher than the 237.852 reading of August of last year....with the lower fuel costs and just a modest increase in food, core prices, which exclude food and energy, rose by 0.1% in August, as the unadjusted core index rose from 242.436 to 242.651, to a level 1.83% ahead of its year ago reading of 238.296...regionally, prices for urban consumers fell 0.1% in the West, fell 0.2% in the South and in the Northeast and were mostly unchanged in the Midwest for the month, while they've risen 1.3% in the West while falling slightly elsewhere over the past year, with a trend toward greater price increases within regions in cities of more than 1,500,000 people...

the seasonally adjusted energy price index fell by 2.0% in August after falling 0.1% in July and rising 1.7% in June, leaving energy prices an average of 15.0% lower than they were in August a year ago...prices for energy commodities were 4.1% lower in August while the index for energy services saw a 0.5% increase, only its 2nd increase in 6 months....the drop in the energy commodity index was driven by a 4.1% decrease in the price of gasoline, the largest component, while fuel oil prices fell 8.1% and prices for other fuels, including propane, kerosene and firewood, averaged a 0.8% decrease…within energy services, the index for utility gas service rose by 1.2% after falling 1.4% in July, leaving utility gas priced 11.5% below a year ago, while the electricity price index rose by 0.3%, while prices for electricity remained 0.6% below those of a year earlier...energy commodities are now priced 23.6% below their year ago levels, with gasoline 23.3% lower than a year ago, while the energy services price index is still 3.0% lower than last August...

the seasonally adjusted food index rose by 0.2% in August, after rising 0.2% in July and 0.3% in June, as prices for food at home rose 0.3% while prices for food away from home rose 0.2%, as average prices at fast food outlets rose 0.3% and rose 0.2% at full service restaurants while food prices at employee sites and schools fell 0.5%...the increase in prices for food at home was driven by a 1.5% increase in the fruits and vegetables index, which saw fresh fruit prices rise 2.1% despite a 2.3% drop in apple prices, saw fresh vegetables rise 1.7% despite a 1.7% drop in potato prices, while processed fruits and vegetables just rose 0.1%...there was also a 0.5% increase in the meats, poultry, fish, and eggs index as eggs rose 7.7%, more than offsetting price decreases of 0.6% for beef, 0.5% for pork, and 0.4% for poultry...in other food groups, the index for cereals and bakery products fell 0.1% on 1.6% lower priced rice and 1.5% lower priced white bread, the dairy products index fell 0.3% on a 1.5% drop in milk prices, beverage prices rose 0.1% on a 0.5% increase in carbonated drinks, and the other foods at home index fell 0.2% on 0.8% lower soups and 0.6% lower prices for condiments....over the past year, only egg prices are now up by 35.3% while all other food items have seen annual price changes of less than 10%...the itemized list for price changes in over 100 separate food items is included at the beginning of Table 2, which gives us a line item breakdown for prices of more than 200 CPI items overall...

among the seasonally adjusted core components of the CPI, which rose by 0.1% in August, the composite of all CPI commodities less food and energy commodities fell by 0.1%, while the composite for all services less energy services rose by 0.1% on 0.2% increase in the cost of shelter, which accounts for more than half of the services index and nearly one third of the total CPI...within the shelter components, rent of one's primary residence rose by 0.3% and owner's equivalent rent rose by 0.2%, while the cost of lodging away from home fell 0.6% on 0.6% lower school dorm housing and a 0.5% decrease in hotel and motel rates...among other services, the transportation services index fell 0.3% on a 3.1% drop in airline fares, while the medical care services index was unchanged as a 0.3% increase in hospital services offset a 0.3% decrease in doctor's fees...other services seeing a price change greater than 1% in August included rental of video discs and similar media, which saw a 3.8% price increase, and admissions to sporting events, which were 1.4% higher..

among consumer goods, the index for household furnishings and supplies fell 0.4% on a 2.2% drop in prices for living room, kitchen, and dining room furniture and a 1.4% decrease in prices for window coverings; apparel prices rose 0.3% as prices for men's outerwear rose 3.0% and prices for women's dresses rose 2.9%, while prices for women's outerwear fell 3.4%...medical care commodities also rose 0.3% on a 0.4% increase in prescription drug prices...meanwhile, recreation commodities fell 0.4% on 1.5% cheaper TVs, 1.3% lower priced audio discs, tapes and other media, 1.1% lower priced photographic equipment, and 0.9% cheaper toys; the education and communication commodities index was 0.3% lower despite a 1.9% increase in college textbooks, while the transportation commodities less fuel index fell 0.1% one a 0.4% drop in prices for used cars and trucks while new car prices were unchanged...other than the aforementioned eggs, only telephones, which saw prices fall by 14.9%, and televisions, which were 13.0% cheaper, saw their prices change by more than 10% over the past year...

the average 0.1% decrease in prices for core commodities would suggest that real personal consumption expenditures of goods for August will be 0.1% higher than the 0.2% increase we saw reported with retail sales, with the caveats that retail sales of gasoline and food would need to be adjusted separately with their appropriate price change index, and that the 0.7% increase in consumption at bars and restaurants would be included with personal consumption of services...as grocery store sales of food rose 0.7% with a 0.3% price increase, real consumption of food would be up 0.4% higher, while the 1.8% decrease in gas station sales adjusted with the 2.2% lower price of gasoline would suggest that real consumption of gasoline was also 0.4% higher than in July...

August Industrial Production 0.4% Lower on Drop in Autos

industrial production fell by 0.4% in August after increasing by an upwardly revised 0.9% in July...the Fed's G17 release on Industrial production and Capacity Utilization for August showed that the 0.4% decrease in seasonally adjusted industrial production came after the increase in July production was revised from 0.6% to 0.9%, the increase in June production was revised from 0.1% to unchanged, the decrease in May production was revised from -0.3% to -0.4%, the decrease in April production was revised from -0.3% to 0.2%, and the decrease in March production was revised from -0.1% to -0.2%... the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, thus fell to 107.1 in August from an unchanged reading of 107.5 in July after the June index was revised from 106.9 to 106.6 and the indexes for March, April and May were all revised 0.1 lower...the industrial production index, a measure of real output, is now only 0.9% higher than it was a year ago...to the extent that this report plays into GDP, the downward revision to April, May and June output would suggest a weaker than originally reported 2nd quarter growth rate when the 3rd estimate of GDP is released next week, which will correspondingly make 3rd quarter growth higher from a lower base...

the manufacturing index fell by 0.5% in August after a 0.9% increase in July as the 10.8% increase in production of automotive products in July was halved by a 5.4% decrease in August... the index for manufacturing fell from 105.8 to 105.3, after the the June index was revised up from 105.7 to 105.8 and the June index was unchanged at 104.9...with the decrease, the revised manufacturing index has deteriorated to 1.4% higher than a year ago, vs the 1.5% year over year increase reported last month...the mining index, which is dominated by oil and gas drilling, fell 0.6% in August after the July increase was revised from 0.2% to 1.8%, largely through downward revisions of April, May and June....the mining index now stands at 116.7 after the July index was revised from 117.1 to 117.5, which is now 3,2% below its year ago reading....the utility index, meanwhile, rose 0.6% in August after falling a revised 0.2% in July as the previously reported 2.3% increase in June was revised down to a 1.0% increase...those and other revisions to prior months left the utility index at 103.6, up from the 103.4 reported last month and now just 3.2% higher than a year ago...

this report also gives us capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which fell from 78.0% in July to 77.6 in August...seasonally adjusted capacity utilization for all manufacturing industries was down 0.4% to 75.8% as utilization of durable goods production facilities fell from 76.6% to 75.8%...capacity utilization for mining fell from 84.7% in July to 84.0% in August, while utilities were operating at 79.2% of capacity during August, up from the revised 78.7% in July...for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and a handful of other special categories....

August Home Starts and Permits Flat

the report on New Residential Construction for August (pdf) from the Census Bureau estimated that the widely watched count of new housing starts was at a seasonally adjusted annual rate of 1,126,000 in August, which was 3.0 percent (±11.3%)* below the revised July estimate of 1,161,000 annually but 16.6 percent (±10.4%) above last August's rate of 966,000 housing starts a year...as you know, the asterisk indicates that the Census did not have sufficient data to determine whether housing starts rose or fell over the past month, with the figure in parenthesis the most likely range of the change indicated; thus, August housing starts could have been down 14.3% or up 8.3% for all they know, with subsequent revisions further obscuring the change, as the July annual rate of starts was revised down from 1,206,000 to 1,161,000 units...the annual rates of starts indicated by the headline change are extrapolated from a survey of a small percentage of permit offices visited by Census field agents, which estimated that 99,900 housing units were started in August, down from 108,500 units started in July, which was initially estimated at 112,300 housing starts...the unadjusted estimates also show that 66,900 single family homes were started in July, while 32,500 housing units were started in apartment buildings with 5 or more units...

the monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised starts data...in August, Census estimated new permits were issued at a seasonally adjusted annual rate of 1,170,000, which was 3.5 percent (±1.4%) above the revised July rate of 1,130,000 permits annually and 12.5 percent (±1.9%) above the rate of permit issuance a year earlier...again,.the estimates for new permits reported here were extrapolated from the unadjusted estimate, which showed permits for 98,300 housing units were issued in August, which was down from the estimated 102,000 new permits issued in July, so we see that it was a seasonal adjustment that turned the reported permits positive...those August permits included 61,200 permits for single family homes and 34,200 permits for housing units in apartment buildings with 5 or more units, with actual permits issued down in every region of the country...

July Business Inventories and Sales Both Up 0.1%

following the release of retail sales report, Census released the composite Manufacturing and Trade Inventories and Sales report for July (pdf), which incorporates the revised July retail data and gives us a complete picture of the business contribution to the economy for that month...according to the Census Bureau, total manufacturer's and trade sales were estimated to be valued at a seasonally adjusted $1,328.0 billion in July, 0.1% (±0.2%) higher than June revised sales, but still down 2.7 percent (±0.5%) from July a year earlier...note that total June sales were revised up more than 0.1%, from $1,325.5 billion to $1,327,245 million....manufacturer's sales fell by 0.2% from June to $483,594 million, retail trade sales, which exclude restaurant & bar sales from the retail sales reported earlier, rose by 0.8% to $394,919 million, and wholesale sales fell by 0.3% to $449,492 million...

meanwhile, total manufacturer's and trade inventories, a major component of GDP, were estimated to be at a seasonally adjusted $1,812.4 billion at the end of July, 0.1 percent (±0.1%) higher than in June and up 2.6 percent (±0.5%) from July a year earlier...seasonally adjusted inventories of manufacturers were estimated to be valued at $651,190 million, 0.1% less than in June, inventories of retailers were valued at $576,881 million, 0.6% greater than June, and inventories of wholesalers were estimated to be valued at $584,281 million at the end of July, down 0.1% from June...the 0.1% increase in the nominal value of July business inventories stands in stark contrast to the 7.0% annualized increase in the value of inventories from the 1st quarter to the 2nd, and with average July prices little changed, it appears that this July pullback in inventory growth will have a substantial negative impact on 3rd quarter GDP growth...

wholesale prices flattened in August as the seasonally adjusted Producer Price Index (PPI) for Final Demand was unchanged, as a 0.6% decrease in prices for wholesale goods was offset by a 0.4% increase in final demand for services...although the PPI had risen 0.2% in July and 0.4% in both May and June, it still remains 0.8% below its year ago level, the same as it was in July, largely due to lower wholesale food and energy costs..

the index for final demand for goods, aka 'finished goods', fell by 0.6% in August after falling 0.1% in July and rising 0.7% in June, as the index for wholesale energy prices fell by 3.3%, led by 11.0% lower wholesale prices for home heating oil and 7.7% lower wholesale gasoline prices...the price index for final demand for foods was 0.3% higher, as a 32.3% increase in wholesale fresh egg prices more than offset a 10.4 drop in wholesale grain prices (see table 4).....excluding food and energy, the index for final demand for wholesale core goods decreased by 0.2% in August after being unchanged in July, as a 1.2% decrease in wholesale prices for metal cutting tools was the largest of many price decreases..

meanwhile, the index for final demand for services rose 0.4% in August after rising 0.4% in July and 0.2% in June, as the index for final demand for trade services rose by 0.9%, more than offsetting a 0.7% drop in the index for final demand for transportation and warehousing services, while the index for final demand for services less trade, transportation, and warehousing services rose 0.2%....margins for apparel, footwear, and accessories retailers increased by 7.0%, margins of gas stations and other fuels retailers rose 10.3%, and margins on recreational activity instruction fees rose 9.1% in the largest services increases..

this month's report also showed the price index for processed goods for intermediate demand fell by 0.6% after falling by 0.2% in July and rising 0.7% in June, as the index for intermediate processed goods slipped to 7.0% lower than in August a year ago....the decrease this month was once again precipitated by a 2.1% drop in prices for intermediate energy goods, while the index for processed foods and feeds was unchanged and the price index for processed goods for intermediate demand less food and energy slipped 0.2%...in addition, the price index for intermediate unprocessed goods fell by 4.4% in August after falling 2.9% in July, as prices for crude energy materials were 9.5% lower, the index for unprocessed foodstuffs and feedstuffs fell 0.1%, and the index for other raw materials fell 4.8%…this left the raw materials index 23.6% lower than it was a year ago, as it has now been negative year over year for 13 months running...

finally, the price index for services for intermediate demand rose by 0.7% following a 0.2% increase in July, as the index for trade services for intermediate demand rose by 1.1%, the index for transportation and warehousing services for intermediate demand fell 0.3%, and the price index for services less trade, transportation, and warehousing for intermediate demand was 0.7% higher...over the 12 months ended in July, the price index for services for intermediate demand has now risen 1.8%...

Value of July Wholesale Sales Falls 0.3%; Inventories Down 0.1%

the July report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $449.5 billion, 0.3 percent (+/-0.5)* lower than the revised June level, and were 4.2 percent (+/-1.4%) lower than wholesale sales of a year earlier...the June preliminary estimate was revised upward $1.0 billion or 0.2 percent, and hence the value of wholesale sales reported in July was just 0.1% lower than the $449.9 billion that was reported last month for June...wholesale sales of durable goods rose 1.2 percent (+/-0.9%) from last month and were up 0.2 percent (+/-1.6%)* from a year earlier with wholesale sales of machinery and equipment 5.2% higher than in June while wholesale sales of metals dropped 4.2%, at least in part due to lower commodity prices...wholesale sales of nondurable goods were down 1.7 percent (+/-0.5%) from June and were down 8.0 percent (+/-1.9%) from last July, with wholesale sales of petroleum and petroleum products down 8.2%, and wholesale sales of farm products down 2.2% on the month, mostly on lower prices...as an intermediate activity, wholesale sales are not included in GDP except as a trade service, since they do not represent an increase in the output of the goods sold....

on the other hand, the monthly change in private wholesale inventories is a major factor in GDP, as additional goods “on the shelf” represent goods that were produced, and the Census estimated they were valued at $584.3 billion at the end of July, 0.1 percent (+/-0.4%)* lower than the revised June level but 4.9 percent (+/-1.4%) above the valuation of last July's inventories, while June's preliminary inventory estimate was revised down by $1.2 billion or 0.2%, so July wholesale inventories are actually 0.3% lower than the $586.2 billion reported last month for June....wholesale durable goods inventories were up were up 0.1 percent (+/-0.4%)* from June and 5.0 percent (+/-1.8%) higher than a year earlier, as the value of inventories of vehicles and parts were 1.0% higher than June, while the value of inventories of metals and minerals were down 1.4%...inventories of nondurable goods were valued 0.5 percent (+/-0.7%) lower than June, but were valued 4.8 percent (+/-1.8%) higher than last July, as the value of inventories of petroleum and petroleum products was down 4.8% and inventories of drugs and druggists' supplies were down 3.2 percent while inventories of raw farm products were 13.3% higher than in June..with the July producer price index for finished goods down by 0.1% on 0.6% lower energy prices, while intermediate wholesale prices fell 0.2%, real wholesale inventories appear to be up marginally from June but not enough to make a positive contribution to 3rd quarter GDP..

Foreclosures Fall to 1.4% of July Mortgages; Time to Foreclose Still at 1,011 Days

the Mortgage Monitor for July(pdf) from Black Knight Financial Services (BKFS, formerly LPS) reported that there were 711,265 home mortgages, or 1.40% of all mortgages, remaining in the foreclosure process at the end of July, which was down from 739,498, or 1.46% of all active loans that were in foreclosure at the end of June, and down from 1.80% of all mortgages that were in foreclosure in July of last year...these are homeowners who had a foreclosure notice served but whose homes had not yet been seized, and the May "foreclosure inventory" remains the lowest percentage of homes that were in the foreclosure process since late 2007... new foreclosure starts also fell, from 79,018 in June to 75,404 in July, while they remain around 60% above the monthly level of new foreclosures we saw in the precrisis year of 2005...

in addition to homes in foreclosure, July BKFS data showed that 2,388,812 mortgages, or 4.71% of all mortgage loans, or were at least one mortgage payment overdue but not in foreclosure, down from 4.82% of homeowners with a mortgage who were more than 30 days behind in June, and down from the mortgage delinquency rate of 5.64% in July a year earlier, and also the lowest mortgage delinquency rate since 2007...of those who were delinquent in May, 886,028 home owners, or 1.75% of those with a mortgage, were considered seriously delinquent, which means they were more than 90 days behind on mortgage payments, but still not in foreclosure at the end of the month...combining these totals, we find a total of 6.11% of homeowners with a mortgage were either late in paying or in foreclosure at the end of July, and 3.15% of them were in serious trouble, ie, either "seriously delinquent" or already in foreclosure at month end...

as you may recall, the Mortgage Monitor (pdf) is a mostly graphics presentation that covers a variety of mortgage related issues each month; in addition to the summary data on delinquencies and foreclosures, this July monitor also includes several pages of graphics showing home price appreciation trends based on their own price index, net equity among US mortgage holders, and second lien and home equity loan performance data...some explanation of what those graphics reveal can be found in the BKFS press release that introduces the July Mortgage Monitor: Total Equity in U.S. Mortgage Market at $7.6 Trillion, Up $825 Billion Year-to-Date; however, since those topics are outside of our normal purview, we'll just include below that part of the Mortgage Monitor summary table showing the monthly count of active home mortgage loans and their delinquency status, which was excerpted from page 14 of the pdf....

in the table below, the columns show the total active mortgage loan count nationally for each month given, number of mortgages that were delinquent by more than 90 days but not yet in foreclosure, the monthly count of those mortgages that are in the foreclosure process (FC), the total non-current mortgages, including those that just missed one or two payments, and then the number of foreclosure starts for each month the past year and a half and for each January shown going back to January 2008….in the last two columns, we see the average length of time that those who have been more than 90 days delinquent have remained in their homes without foreclosure, and then the average number of days those in foreclosure have been stuck in that process because of the lengthy foreclosure pipelines…the average length of delinquency for those who have been more than 90 days delinquent without foreclosure, now at 535 days, is down just a bit from the April record of 544 days, while the average time for those who’ve been in foreclosure without a resolution is also off its record high but is still nearly three years at 1011 days…

Employers Add 173,000 Jobs in August - Labor Force Participation Stays at a 38 Year Low

the Employment Situation Summary for August indicated the weakest job creation since March, with a record number of us not in the labor force, while the unemployment rate fell to a post recession low of 5.1%....the establishment survey data indicated that employers added a seasonally adjusted 173,000 jobs in August, while the payroll job increases for June and July were both revised to 245,000, from the previously reported 231,000 jobs added in June and 215,000 jobs in July….August job increases were entirely in the private service sector and in government, as 24,000 fewer of us were employed by goods producers than in July, with the loss of 17,000 jobs in manufacturing and another 10,000 in resource extraction...the health care and social assistance sector added 56,400 jobs, with 21,100 of those in ambulatory services and another 15,900 jobs in hospitals...the leisure and hospitality sector added 33,000 jobs, with 26,100 of those in restaurants and bars, as did the professional and business services category, where 15,800 more were employed in administrative and waste services, while the various branches of government also added 33,000 jobs, with 22,900 of those in local school districts...in addition, employers reported the average workweek rose by 0.1 hour to 34.6 hours and the average hourly earnings for all non-farm employees rose by 8 cents to $25.09...

the August household survey estimated that the seasonally adjusted count of those employed rose by 196,000 to 149,036,000, while the number of unemployed fell by 237,000 to 8,029,000, which was enough to reduce the unemployment rate by 0.2%, from 5.3% to 5.1%...however, with the reduction of the unemployed greater than the increase in the employed and the civilian working age population increased by 220,000 new entrants, the count of those not in the labor force rose by 261,000 to a new record at 94,031,000, and the labor force participation rate fell from 62.623% in July to 62.552% in August, a new 38 year low, albeit officially statistically unchanged at 62.6%...with the increase in the employed, the employment to population ratio, which we could think of as an employment rate, rose from 59.3% to 59.4%...while the number who reported they were working part time fell by 131,000 to 19,760,000, those who reported being stuck in just part time work involuntarily rose by 158,000 to 6,483,000, and hence the alternative measure of unemployment, U-6, which includes those "employed part time for economic reasons", only fell by 0.1% to 10.3%...

the BLS employment situation press release itself is not difficult to read or understand, so you can get more details on this report from there...note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it along side the press release to avoid the need to scroll up and down the page...thus, when you encounter a line such as "The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours. (See tables B-2 and B-7.)" you can quickly open Table B-2 and Table B-7 where you will find average weekly hours and hours of overtime for both all employees and for non-supervisory employees by industry sector, and where you'd see that average includes workweeks as long as 44.4 hours for those in "mining and logging" down to an average of 25.0 hours for those working in leisure and hospitality sectors…

our July trade deficit fell by 7.3% from June as the value of our exports rose and the value of our imports fell...the Census report on our international trade in goods and services for July indicated that our seasonally adjusted goods and services trade deficit fell by $3.3 billion to $41.9 billion in July from a June deficit which was revised from $43.8 billion to $45.2 billion....the value of our July exports rose $0.8 billion to $188.5 billion as our exports of goods rose by $0.6 billion to $128.2 billion and our exports of services increased $0.2 billion to $60.3 billion, while our imports fell $2.5 billion to $230.4 billion on a $2.7 billion decrease to $189.6 billion in our imports of goods which was partially offset by a $0.2 billion increase to $40.8 billion in our imports of services...export prices averaged 0.2% lower in July, so the real growth in exports was higher by that fraction, while import prices were 0.9% lower, thus incrementally increasing real growth in imports by that percentage from the nominal dollar amounts reported here...

referencing Exhibit 7 in the Full Release and Tables for July, we find that a $596 million increase to $13,275 million in our exports of vehicles, parts, and engines was largely responsible for our increased exports; in addition, our exports of industrial supplies and materials rose $303 million to $37,376 on a $348 million increase in our exports of non-monetary gold, our exports of capital goods rose $179 million to $44,298 million on increases in most line items including $462 million more industrial machines that more than offset a $738 million decrease in our exports of civilian aircraft, our exports of foods feeds and beverages rose $178 million to $10,691 million on a $263 million increase in our exports of soybeans, and our exports of goods not categorized by end use rose by $151 million to $5,632 million; those export increases were partially offset by a $426 million decrease to $16,327 million in our exports of consumer goods...

meanwhile, Exhibit 8 in the Full Release and Tables shows us that a $2,609 million decrease to $47,806 million in our imports of consumer goods was largely responsible for our reduced July imports, as we imported $1,469 million less pharmaceuticals and $1,251 million less cellphones and similar household goods than in June...in addition, our $10,525 million in imports of foods, feed and beverages were $593 million less than in June, as we imported $278 million less fish and shellfish and $147 million less meat products...partially offsetting those decreases, our imports of industrial supplies and materials rose by $370 million to $42,285 million on a $456 million increase in our imports of crude oil, our imports of vehicles, parts, and engines rose by $326 million to $30,003 million, our imports of capital goods rose $233 million to $49,291 million on a $576 million increase in our imports of computers, which was partially offset by a $229 million decrease in our imports of civilian aircraft, and our imports of goods not categorized by end use rose by $158 million to $6,931 million...for more details, the two itemized lists that we referenced show the value of more than 200 export and import line items, both monthly and year to date, in table form in exhibit 7 and exhibit 8 of the full pdf for this release...

to gauge the impact of July trade on 3rd quarter growth, we must first adjust the value of July imports and exports for inflation and compare July to the similarly adjusted 2nd quarter figures... exhibit 10 in the pdf for this report gives us monthly goods trade figures by end use category and in total in chained 2009 dollars, the same inflation adjustment used by the BEA to compute trade figures for GDP, albeit they are not annualized....from that table, we find that 2nd quarter real exports averaged 120,343 million monthly in 2009 dollars, while inflation adjusted July exports were at 120,725 million using the same 2009 dollar quantity index...annualizing the change between the two figures, we find that 3rd quarter real exports are running at a 1.28% rate over those of the 2nd quarter, or at a pace that would add 0.16 percentage points to 3rd quarter GDP...in a similar manner, we find that our 2nd quarter real imports averaged 178,201 million monthly in chained 2009 dollars, while inflation adjusted July imports were at 176,933 million...that would indicate that so far in the 3rd quarter, our real imports are falling at a 2.8% annual rate from those of the 2nd quarter...since imports subtract from GDP because they represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, that 2.8% rate of decline would add another 0.42 percentage points to 3rd quarter GDP....hence, if July trade figures are maintained throughout the 3rd quarter, our improving balance of trade would add 0.58 percentage points to the growth of 3rd quarter GDP...

July Construction Spending Increased by 0.7% from June Spending that was Revised 1.1% Higher

private construction spending was at a seasonally adjusted annual rate of $787.8 billion, 1.3 percent (±1.0%) above the revised June estimate of $777.4 billion annually, with residential spending rising to a seasonally adjusted annual rate of $380.8 billion in July, 1.1 percent (±1.3%) above the revised June estimate of $376.6 billion, while private non-residential construction spending was at an annual rate of $407.0 billion in July, 1.5 percent (±1.0%) above the revised June estimate of $400.8 billion...private spending for manufacturing facilities was at a $93,402 million rate annually, 4.7% higher than June and 73.1% higher than last July, while outlays for construction of lodging fell 1.1% to $21,763 million in July but were still 41.2% higher than a year ago....meanwhile, public construction spending was estimated at a rate of $298.2 billion annually, 1.6 percent (±2.6%)* above the revised revised May estimate of $293.5 billion in spending, with public recreation spending down 11.9% to $10,792 million, highway and street spending down 0.2% to $90,315 million, and education construction spending down 3.0% to $66,374 million..

Value of July Factory Orders Up 0.4%, Shipments Down 0.2%, Inventories Down 0.1%

the Full Report on Manufacturers’ Shipments, Inventories, & Orders for July (pdf), also from the Census Bureau, reported that the value of new orders for durable goods rose in July by a seasonally adjusted $2.0 billion or 0.4% to $482.0 billion, largely because of the jump in automobile orders that we saw with with the advance report on durable goods last week, which were revised higher to show a 2.2% increase this week's report...the 4.0% increase in automotive equipment orders combined with a 19.5% increase in orders for ships and boats led to a 5.0% increase in orders for transportation equipment, without which new factory orders actually fell by 0.6%, as the value of new orders for non-durable goods was 1.3% lower in July than in June...while new factory orders increased in both June and July, those increases followed decreases of 1.1% in May and 0.7% in April, and with the output of refineries, commodity food producers, and chemical plants all priced much lower than a year ago, the value of year to date new orders still remains 7.3% less than a year ago...

this report also showed that the value of factory shipments fell by $0.8 billion or 0.2 percent to $483.6 billion, which followed an increase by 0.6% in June and a decrease of 0.2% in May...shipments of durable goods rose 1.0% almost entirely on a 2.9% increase in shipments of transportation equipment, led by a 9.5% increase in shipments of light trucks and utility vehicles...meanwhile, the value of shipments of non-durable goods fell by 1.3%, entirely on a 8.7% decrease in shipments from refineries, which saw somewhat lower product prices in July...meanwhile, the aggregate value of July factory inventories, which had been up each month in the 2nd quarter, decreased by $0.6 billion or 0.1 percent to $651.2 billion...inventories of manufactured durable goods fell by $0.3 billion or 0.1 percent to $401.8 billion as lower priced inventories of primary metals fell by $0.2 billion, while inventories of non-durable goods also fell by $0.3 billion or 0.1% to $249.4 billion on a $1.5 billion or 3.9% drop to $37.0 billion in inventories of coal and refined products.....

finally, the value of unfilled orders rose by $2.8 billion or 0.2 percent to $1,198.0 billion, following a statistically insignificant increase in June...a 0.4% increase to $614,835 million in the order book for commercial aircraft led to a 0.4% increase in unfilled orders for transportation equipment, which now account for more than 2/3rds of all unfilled factory orders....without that increase in unfilled orders for transportation equipment, the overall factory order book was down $508 million to $394,950 million, or a bit more than 0.1%...with both shipments and inventories higher, the widely watched unfilled orders-to-shipments ratio was at 1.35 in July, unchanged from June, although as we've pointed out in the past, that ratio has lost much of its relevance in the current period of collapsing commodity prices...

note on the graphs used here

in March a year ago the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our static graphs before then...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all created and stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where an older graph has gone missing, click on the blank space where it had been in order to view it in the new format....